Consumer Confidence, Pent-Up Demand Drive Retail Gains
Tue, Apr 27, 9:32 PM ET, by RetailSails.com
Retail sales continue to post impressive gains as strong demand for spring merchandise and improving consumer confidence have helped sustain the momentum we have witnessed over the past eight weeks.
The International Council of Shopping Centers (ICSC) reported that chain store sales rose a slight 0.2% from the prior week, the sixth consecutive gain, while year-over-year sales jumped the most in nearly six years, increasing 5.5%.
"Sales continued to improve over the latest week, helped by robust customer traffic, especially at discounters, department and apparel stores," said Michael Niemira, ICSC's chief economist. "The release of pent-up demand continues to help lift the underlying spending profile for today's consumers."
Indeed, consumers are feeling much better about their personal finances and have shown a willingness to be less cautious with their discretionary spending so far this year. The Conference Board reported this morning that its Consumer Confidence Index rose to 57.9 in April, up from 52.3 in March and the highest level since September 2008.
Lynn Franco, Director of The Conference Board Consumer Research Center, said “Consumers' concerns about current business and labor market conditions eased again. And, their outlook regarding business conditions and the labor market was also more positive than last month. Looking ahead, continued job growth will be key in sustaining positive momentum.”
March same-store sales soared 9.0%, according to ICSC Research, due to an early Easter boost. Therefore, April comps are expected to be flat to down 3%. However, the combined March-April period is projected to show a healthy 4% increase from last year.
Redbook Research reported that same-store sales posted a 2.2% increase for the week ending April 24th, following a 2.6% gain the prior week. Month to date, sales are up 2.7% over last year, but relative to March sales have declined 2.0%.
"With Easter out of the way and warm weather in most of the country, lawn and garden and spring apparel were reported to be showing signs of spring fever," said Catlin Levis, Rebook analyst. "Activity was geographically diversified, although some retailers indicated particular strength in the west coast, where spring weather generally prevailed," she added.
The company expects total comp sales to be up 2.8% from last year, but off 1.9% from March.
ShopperTrak will not report sales results for last week until tomorrow, but Bill Martin, co-founder of ShopperTrak, had this to say last week:
“Although we've seen some relative strength over the last couple of months, the fact remains that consumer confidence is fairly low, unemployment rates are still high and the trajectory of economic recovery seems somewhat uncertain – all of which could still negatively impact retailers over the next few months.”
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